The future of strategy: A strategist in a box?

Do better data and more accurate technology equate to improved outcomes? The answer seems obvious – especially in business. Surely the more advanced the processing power, the better the strategic execution. But Stephen Hawking might disagree with you, as in an interview with the BBC he delivered some unsettling news.

“The development of full artificial intelligence could spell the end of the human race.” said Mr Hawking.

This may seem like a line out of a science fiction novel, but strategy as a discipline extends far past the planning and implementation of business goals, right into the heart of the study of artificial intelligence (AI).

While the study of artificial intelligence may not seem to have direct implications in the running of most day-to-day business, it is important to understand the current developments that are occurring at the forefront of technology, and how these advancements trickle down into daily life.

Dynamic strategy is all about having the design tailored to the problem.

The history of technological singularity

Humans have long predicted the singularity, a time when we would become obsolete, our intellectual skills outmoded and surplus to the requirements and progress of artificial thinking machines. The word ‘singularity’ is commonly understood as the event at which AI is to be capable of recursive self-improvement, essentially reflexive superintelligence.

A mathematician named Stanislaw Ulam is credited with the first use of the term “singularity”. This was in a 1958 obituary for John von Neumann (a Hungarian-American polymath) in which he recalled their conversation surrounding AI, and came to define the event as, “ever accelerating progress of technology and changes in the mode of human life, which gives the appearance of approaching some essential singularity in the history of the race beyond which human affairs, as we know them, could not continue”.

While seeming much like the realms of science fiction, and less like something that could directly impact daily life, it is nonetheless important for business to stay in the loop of developments, as the technology might be here sooner than we think.

At the 2012 Singularity Summit a time frame of five to 100 years was put forward by Ray Kurzweil, a leading futurist, suggesting the singularity was going to be an event outside of exact prediction, but still, a time frame of 100 years is greatly closer than many may have thought.

AI is to be capable of recursive self-improvement, essentially reflexive superintelligence.

Integrated strategy machines

To consider the limited role of machines is to see a place for humans amongst this technology. Instead of having no place in this brave new world of technology, humans instead can perform specialist roles within ‘integrated strategy machines’ – a theory that humans and machines must work together in order to produce quality outcomes.

Integrated strategy machines is a concept developed by leading strategists Martin Reeves and Daichi Ueda in their article for the Harvard Business Review titled ‘Designing the Machines That Will Design Strategy’. They propose that no matter how advanced technology is, humans are needed to add competitive advantage; that both technology and human intellect must come together.

Many companies already use this integrated approach, for example Amazon, which uses 21 data science systems. As identified by Cambridge University doctorate on data science Vincent Granville, these systems primarily use three programming algorithms: Markov chain models, Monte-Carlo simulations and simplex algorithms.

These algorithms, which seem from the outside entirely foreign to the everyday strategist, actually include recommendation engines, sales forecasting, supply chain optimisation, inventory forecasting systems, a profit optimisation system as well as others. Human strategists work alongside these systems, combining man and machine.

Good strategy is about integrating many parts: big picture thinking as well as detail oriented precision, human and machine.

How would this design work?

Reeves and Ueda formulated six effective ways that one could implement the integrated machine strategy into their business. They are as follows:

Design: Make the design fit the problem – having adaptive, dynamic strategies will serve you well in volatile changeable markets

Human-machine division: Machines haven’t reached singularity (yet) – so it’s humans who still need to do all the creative and reflexive work

A clear interface: The strategy must show clear visualisations, both detail yet descriptive and informative

Integration: Humans and machines must work together seamlessly throughout the strategic operation

Aim: Have a strategic outlook, without trying to solve problems based on your technical capabilities – this is about framing the questions

Data: The production of competitive advantage by producing information that is unique is the sole chore of the integrated strategy machine

Questions for business

The implementation of strategies without humans to execute their conclusions would be pointless. Based on Reeves and Ueda’s requirements for successful strategic integration, employees must be an active piece of the pie, and managers must understand what their goals and issues, as well as the strategy machines.

Some employees who feel excluded by the technology or their own lack of training may feel coy about being involved in the strategic process, and this is detrimental to the successful implementation of strategy across the board. StategyBlocks is a user-friendly programme, designed to be used across the whole of your company.

It is designed to be a visual experience, delivering your strategic goals in a digestible and detailed format. For more information on how StategyBlocks can help take your company to the next level, get in touch with us today.